Creating ‘moments of trust’Executive Summary

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• IHG commissioned research into what travellers are likely to want from their relationships with hotel brands over the coming decade.

• This report analyses the collision of three macro trends – globalisation, localisation and personalisation – and how this is producing an imbalance that is impacting on the way brands have traditionally engaged consumers.

• This imbalance poses a challenge for brands. Over the past decade, brands have focused on how to be both global and local. In recent years, however, the rapid rise of technology-enabled personalisation means that brands must now contend with a third dimension – being personal.

• Over the next decade, the challenge facing global brands across all consumer-facing industries is how to be 3D: globally coherent, locally relevant and personally unique.

• This report examines the benefits that being global, local and personal each brings to brand relationships. It sets out a blueprint for brands to transition from a 2D focus on global and local to a 3D perspective where they are simultaneously global, local and personal through six trust-building actions identified through the research.

• The research is based on a survey of circa 7,000 business and leisure travellers from seven countries (US, UK, Germany, Russia, China, Brazil and the UAE), along with qualitative depth interviews with travellers and expert interviews.

The imperative of trust

• IHG has uncovered an intersection between the macro trends of globalisation, localisation and personalisation that is the key to building relationships – and this intersection is trust.

• In a world that is becoming increasingly uncertain it is the comfort of trust that travellers are looking for. Trust will become one of the most valuable currencies a brand can have in the emerging new Kinship Economy. Brands that build trust reduce uncertainty while cementing enduring connections.

Creating ‘moments of trust’ – the key to building successful brand relationships in the Kinship Economy

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The benefits of being global, local and personal

• The research highlights the importance of being global, local and personal to the next generation of travellers: the “new global explorers” of travellers from emerging markets and younger Millennial travellers.

• The benefits of being global:

• Global brands are well placed to deliver consistently outstanding brand experience every time: 71% of travellers rate global hotel brands as ‘always consistent’, increasing in emerging markets.

• Travellers also expect global hotel brands to be the most innovative. This is especially true for the younger generation of business travellers – 75% of the Millennial ‘laptop and latte’ business travellers (a new traveller group born after 1982 and characterised by an attitude that their office is wherever they happen to be) think that global hotel brands do a better job at being innovative compared to 66% of all travellers.

• Being both consistent and innovative can be achieved if both serve the promise of global coherence, as IHG demonstrates by its consistent track record of delivering innovation that has been so important in building a coherent brand identity over time.

• The benefits of being local:

• Travellers now expect global brands to be relevant to their local tastes, customs and cultures.

• Travellers from emerging markets hold this view most strongly: 68% of travellers from Brazil, 60% from UAE and 58% from China disagree with the statement “a global brand can never be a good fit with local culture”.

• For these travellers the more locally relevant a global brand is, the more trusted that brand is as a result of seeing their local and regional values reflected in the brand.

• The benefits of being personal:

• The rise of personalisation has increased consumer expectations across all industries. This is especially true for travellers in emerging markets.

• The “new global explorers” (a new traveller group of travellers originating from emerging economies) have higher expectations for personalisation than travellers from developed markets: 78% of Russian and 64% of Chinese expect a hotel to tailor the experience they have to their personal needs, compared to 43% of US and 42% of UK travellers.

• In emerging markets, one of the biggest benefits of personalisation is that it makes them feel more respected by the brand. 62% of Chinese travellers agree that personalisation makes them feel respected, compared to 39% of travellers from all countries surveyed.

3D brands of the future

• For 21st Century consumers, the global and local dimensions of brands no longer offer enough on their own. Global brands must be personal too, by adapting products and services that are different from one person to the next. Consumers want the reliability, safety, and authority of global brands. They want the reflection of their local and regional values. And, they want their personal uniqueness respected and addressed.

• For brands, this means managing the promises of being globally coherent, locally relevant and personally unique. The way brands can manage these three promises simultaneously is by creating ‘moments of trust’ through service at every point in the customer journey.

• This research has identified six trust-building actions for global brands that leverage the macro trends of globalisation, localisation and personalisation to create ‘moments of trust’.

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The six trust building actions

1. Be consistent• Hotels must provide a more meaningful

guarantee of consistency that is not standardised hotels, but rather individualised experiences that are delivered within a consistent brand framework of global standards.

• 45% of Millennial travellers agree that a hotel with on-site dining options offering the foods that they would eat at home would motivate them to return to the hotel, compared to 55% of travellers aged over 65.

2. Deliver authentic local customisation• Global brands need to build trust by

customising their global offerings to reflect local variations that give guests reassurance they are experiencing something truly authentic to the locale. The challenge for the hospitality industry is that what is considered ‘truly genuine’ varies by generation.

• For older travellers, authenticity is primarily about a demonstrable connection to local place. 72% of travellers aged over 65 agree that a hotel with on-site dining options featuring authentic ingredients and specialties from the local area would motivate them to return to the hotel, compared to 57% of Millennial travellers.

• For younger generations of travellers, hotel brands also need to enable authentic connections between people, as well as place.

3. Create tailored consumption• Global brands need to support a guest

experience that reflects their individual preferences. Personal technologies mean that it is possible for guests to bring more of home with them when they travel than it was before. This is creating a new expectation among travellers: the desire to enjoy the things they love best during their hotel stay.

• This extends to diet - 72% of travellers aged over 65 said a hotel that made it easy to make healthy food and beverage choices would motivate them to return.

4. Support technology-enhanced service• Global brands need to build trust by

using technology to give guests more self-reliance, but also ensure that guests are supported when something goes wrong. This means hotel brands must offer service that is enhanced by technology, not replaced by technology – even when the service itself is delivered ‘invisibly’ through technology rather than staff.

• Millennials are embracing self-service in hotels more than any other generation: 46% of Millennials agree that being able to check in/out using a mobile device would motivate them to return to the hotel, compared to 38% of total travellers of all ages.

5. Personal relevance• Global brands should build trust by

offering advice and guidance tailored to individual needs and preferences. For the next generation of Millennial travellers, this means giving them the tools to discover for themselves.

• Armed with information from review sites and social networks before they even arrive at the destination, Millennial travellers are less motivated than any other generation by hotel staff that help them find places off the tourist track: 59% of Millennials say this would motivate them to return to a hotel, compared to 70% of ‘mid-lifers’ aged 49 to 65.

6. Use service to surprise and delight• Global brands can build trust by

creating surprise and delight moments that make guests feel valued. However, hotels must tread carefully as trust can easily be damaged if the hotel gets it wrong or breaches personal privacy, and this is true even among the younger generation: only 23% of Millennials say that a hotel that researches their social networks and other online information about them to know what they like best would motivate them to return to a hotel.

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